Oil distributors plan to raise wholesale gasoline prices by 3 yen to 4 yen, effective in September, in line with recent surges in crude oil prices, according to industry sources.
Japan Energy Corp. decided Monday to raise its wholesale gasoline prices by 4 yen per liter next month. Nippon Oil Corp. and other wholesalers are expected to follow suit.
The price increase will be the first in three months. In June, they implemented a 4 yen hike per liter, the sharpest rise since the Persian Gulf crisis in 1990.
As a result, the average price of regular gasoline at the pump is expected to increase from the current 114 yen per liter, already at its highest level in more than eight years.
Procurement costs for gasoline are calculated on crude oil prices and fluctuations of foreign exchange rates. Crude oil futures rose to an all-time high of $49.40 at one point Friday in New York.
An official of a major Japanese oil wholesaler said, “If crude oil prices continue to rise, procurement costs will increase about 4 yen in September compared with their August level.”
The average retail regular gasoline price has increased 9 yen since January, but an industry source said the current level is “near the break-even line” and that another price increase is inevitable if wholesale prices rise.
Tonen General down
Tonen General Sekiyu K.K., which is half-owned by U.S. oil giant ExxonMobil, said Monday its net profit in the first half of 2004 fell 15 percent to 12.42 billion yen, as soaring crude oil prices squeezed profit margins.
The firm, which operates General, Esso and Mobil gas stations, said its revenue rose 3 percent to 1.08 trillion yen during the six months from January to June.
It blamed the earnings drop on rising crude prices, which recently hit record highs.
Dubai crude oil prices, which moved around $28 per barrel between January and March, reached $34 in June, the final month of the reporting period, according to the company.
But an increase in gasoline retail prices during the period was not enough to absorb the rise in crude costs, thereby slashing profit margins, it said.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.